This letter to the editor is in response to Gary Horton’s “Full Speed to the Port!” column entitled “Political Season Reminder: It’s the Math, Stupid” (Feb. 5). The gist of Gary’s comments is that we need to collect more taxes or get less stuff to reduce the federal government’s annual deficits.
I did a little research and here are the facts:
1. Regarding Gary’s statement that Amazon is paying zero tax (a favorite Democrat talking point): I referred to Amazon’s 2018 audited 10-K report and 2019 Q3 10-Q report (both reports are filed with the Securities and Exchange Commission) and here is what I found. In 2018 the provision for income taxes was $1.197 billion (federal $436 million, state $327 million and foreign $434 million). For the nine months ended Sept 30, 2019 (the 2019 full-year 10K report is not yet available), Amazon’s provision for income taxes is $1.6 billion (the 10Q did not break down this amount for federal, state and international). Federal taxes are significantly reduced beginning in 2018 because the federal tax law that became effective Jan. 1, 2018, allows for full depreciation/write-off of equipment purchases. So as Amazon grows and opens new distribution centers and purchases equipment, it gets an immediate tax benefit. There are arguments for and against this provision in the tax law, but it is available to all businesses operating in the U.S., including mom-and-pop companies.
2. Here is a recap of federal revenues and deficits since fiscal year 2012 (T=Trillion, B=Billion):
FY2012 $2.45T $1.087T
FY2013 $2.77T $ 679B
FY2014 $3.02T $ 485B
FY2015 $3.25T $ 438B
FY2016 $3.27T $ 385B
FY2017 $3.32T $ 665B
FY2018 $3.33T $ 779B
FY2019 $3.44T $1.092T
FY2020 (Budget) $3.64T $1.101T
As you can see, revenues have increased every year since FY2012, yet the geniuses in Washington seem to always spend more than revenues. Give them more money and they will spend even more! This supports the argument by many fiscal conservatives that we do not have a revenue problem, it’s all about lack of control over spending. It doesn’t matter which political party controls Congress or the White House, the lawmakers are incapable of generating a surplus or, at a minimum, balancing the budget. My solution (I have been a CPA since 1975, now retired) is to put CPAs in charge of the federal budget and watch how fast we balance the budget and generate surpluses.
3. A point Gary did not address in his column is the significant rise in the interest paid annually on the growing federal debt. Interest payments will soon exceed spending on other major budget categories such as non-defense discretionary, Medicaid/CHIP, etc., growing from $389 billion in FY2019 to an estimated $914 billion in 2028.